Smith v. Zimbalist
2 Cal.App.2d 324, 1934 Cal. App. LEXIS 1425, 38 P.2d 170 (1934)
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Rule of Law:
When parties to a contract for the sale of goods are mutually mistaken as to the fundamental identity of the subject matter, the contract is unenforceable. Furthermore, a description of the goods in a bill of sale constitutes an express warranty by the seller that the goods conform to that description.
Facts:
- George Smith, an 86-year-old collector of rare violins, was visited at his home by Efrem Zimbalist, a world-renowned violinist and collector.
- During the visit, Zimbalist initiated a transaction by picking up two violins and asking Smith what he would take for them, identifying one as a 'Stradivarius' and the other as a 'Guarnerius'.
- Smith, who had not previously offered the violins for sale, agreed to sell both instruments for a total price of $8,000.
- At the time of the transaction, both Smith and Zimbalist fully believed the violins were authentic instruments made by Antonius Stradivarius and Josef Guarnerius.
- Zimbalist signed a receipt acknowledging receipt of 'one violin by Joseph Guarnerius and one violin by Stradivarius'.
- Smith provided a bill of sale certifying he had sold 'one Joseph Guarnerius violin and one Stradivarius violin'.
- It was subsequently determined that the violins were not genuine, but were imitations worth no more than $300.
Procedural Posture:
- George Smith (plaintiff) filed an action in the trial court against Efrem Zimbalist (defendant) to recover the unpaid balance of the purchase price for two violins.
- The trial court found that the sale resulted from a mutual mistake and rendered a judgment in favor of the defendant, Zimbalist.
- The plaintiff, Smith, as appellant, appealed the judgment to the District Court of Appeal.
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Issue:
Does a mutual mistake regarding the fundamental identity of the subject matter of a sale, where both parties believed violins to be genuine masterpieces when they were actually imitations, render the sales contract unenforceable?
Opinions:
Majority - Houser, J.
Yes, the sales contract is unenforceable due to a mutual mistake as to the identity of the subject matter. The court rejected the strict application of the doctrine of caveat emptor (let the buyer beware), aligning with modern authorities which hold that no enforceable contract exists when there is a mutual mistake regarding the essence of the subject matter. The court found that both parties were honestly mistaken, believing the violins to be genuine masterpieces when they were mere imitations; this mistake went to the 'substance of the thing contracted for,' not merely its quality or value. Additionally, the court held that the description of the violins as a 'Guarnerius' and a 'Stradivarius' in the bill of sale created an express warranty by the seller, Smith, that the items conformed to that description. As the violins did not conform, the contract was unenforceable on this ground as well.
Analysis:
This decision represents a significant departure from the early, rigid doctrine of caveat emptor, embracing the more equitable principle of mutual mistake. It solidifies the rule that a mistake regarding the fundamental identity of a good, rather than just its quality or value, can void a contract. The case also affirms that specific descriptive language in a bill of sale can create an express warranty, binding the seller to that description even in the absence of fraud or explicit words of guarantee. This provides greater protection for buyers and clarifies that sellers can be held to the descriptions they provide in sales documents.
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